Canada's Rental Market Faces Record High Vacancy Rates Amid Economic Shifts

High Vacancy Rates in Canada's Rental Market

The latest Canadian National Multifamily Report released by Yardi® Canada highlights a significant shift in the country’s rental landscape for Q2 2025, marking a pivotal moment as vacancy rates hit a five-year high of 4.1%. This report, which compiles anonymized data from over 511,000 units across 5,800 properties, sheds light on the contributing factors leading to these changes.

Rising Vacancy Rates

Major metropolitan areas have been significantly impacted, with Calgary witnessing a staggering 7.4% vacancy rate, Toronto at 4.2%, and Edmonton at 4.6%. Factors such as slower population growth, a reduction in immigration, and an increase in rental supply appear to be driving this trend. The pandemic's lingering economic uncertainties are dimming the prospects for many potential renters, further exacerbating the situation.

Despite the surge in vacancies, the report indicated that in-place rents, which include all current leases as well as renewals, still managed a slight increase. The average rent rose by $14, bringing the national average to $1,720 in Q2 2025, although this underscores a slowdown in year-over-year rent growth from 6.3% to 4.8%.

New Metrics and Trends

This quarter, Yardi introduced a new metric known as the Average Resident Length of Stay. This new figure monitors how long tenants typically remain in a unit before they decide to vacate. Notably, CMAs facing restrictive supply like Toronto and Hamilton have seen residents staying for an average of 47 and 45 months, respectively.

Additionally, the lease-over-lease rent growth—which tracks the changes in rent for newly signed leases—has dropped to 2.8%, the lowest recorded since Yardi commenced tracking this data in 2020.

Insights from Industry Experts

Peter Altobelli, the Vice President and General Manager at Yardi Canada, commented on the rising vacancy rates: “Vacancy is rising, and the market is entering a new chapter. With shifting demographics, economic uncertainty, and growing supply, housing providers must rethink how they forecast, invest, and operate.” He emphasized that the future demands sharper insights, quicker adaptations, and a reinforced focus on long-term resilience.

Even with the rising vacancies, the national turnover rate remains relatively low at 23.4%, though some regions are noting slight increases. In a bid to attract new tenants amidst escalating vacancies, landlords are starting to offer various incentives, including rent concessions like free rent periods and move-in bonuses.

For further insights and a comprehensive overview of the regional market, you can visit Yardi's full Q3 2025 report at Yardi Multifamily Report.

The Impact Moving Forward

As the Canadian rental market navigates these transformative changes, it's essential for property owners and rental agencies to stay informed and agile. Strategies that prioritize tenant retention and anticipate future market trends will be crucial for sustaining profitability in an increasingly competitive environment.

Yardi, renowned for its cutting-edge software solutions tailored for real estate businesses worldwide, continues to lead the way in providing tools and resources that enable property management companies to thrive amidst these challenges. With a global workforce exceeding 10,000 employees, Yardi remains committed to innovating within the real estate sector, ensuring their clients are equipped for the future.